Jazz Semiconductor

Jazz Semiconductor is a United States semiconductor wafer foundry based in Newport Beach, California. The company provides manufacturing services for customers that develop products in areas such as wireless communications, optical networking, power management, data storage, and aerospace and defense. Rather than primarily selling branded end-user chips, its business is centered on manufacturing integrated circuits for other semiconductor companies, particularly designs that require specialized analog, radio-frequency, mixed-signal, or other non-digital process capabilities. The company was created from the former Newport fabrication operation associated with Conexant Systems. Before March 2002, the facility operated through Newport Fab, LLC, a Conexant subsidiary. Jazz Semiconductor Systems was established on February 15, 2002, and was renamed Specialtysemi, Inc. later that month before adopting the Jazz Semiconductor, Inc. name in May 2002. Conexant and affiliates of the Carlyle Group provided initial financial backing. Shu Li became chief executive in May 2002, and the company subsequently sought to establish itself as an independent specialty foundry rather than remain an internal manufacturing operation. Jazz attracted strategic customer and investor interest during its early development. RF Micro Devices invested $60 million in October 2002 and became a customer. The company nevertheless reported losses in 2003, 2004, and 2005. It made several attempts to pursue an initial public offering between January 2004 and July 2006, with a proposed Nasdaq symbol of JAZZ, but those efforts did not result in a completed listing. The failed IPO attempts reflected the difficulty of financing a capital-intensive foundry business while the company was still building scale and profitability. A major ownership change began in 2006 when Acquicor Technology, a blank-check company associated with former Apple executives Gil Amelio, Steve Wozniak, and Ellen Hancock, agreed to acquire Jazz for approximately $260 million in cash. Acquicor completed financing through convertible notes and other transactions, and the acquisition closed on February 16, 2007. Five days later, Acquicor changed its corporate name to Jazz Technologies and adopted the JAZ ticker. Jazz Semiconductor continued operating as the manufacturing subsidiary and retained its established operating name. Shu Li resigned in March 2007, after which Gil Amelio became chief executive of the subsidiary. The combined company struggled with debt, recessionary conditions, and the costs associated with its earlier transaction structure. In early 2008, Jazz Technologies disclosed a loss and indicated that it was considering a sale. The public company’s market value had also fallen substantially from its IPO-era levels, increasing pressure to find an industrial or strategic owner. In May 2008, Jazz agreed to combine with Tower Semiconductor of Israel in a stock-for-stock transaction. The merger closed in September 2008, making Jazz Semiconductor part of Tower’s specialty foundry organization. The transaction transferred the business from the financially strained Jazz Technologies structure into Tower Semiconductor, whose broader platform included specialty process technologies and manufacturing operations. Amelio retired as an officer and director when the merger closed. Jazz Semiconductor is therefore best understood today as a Tower Semiconductor-owned specialty foundry operation and brand rather than as an independently traded company.

Jazz Semiconductor originated in the Newport, California fabrication operation that had been associated with Conexant Systems. Before the company became independent, the facility operated through Newport Fab, LLC, a Conexant subsidiary. Jazz Semiconductor Systems was founded on February 15, 2002. It was renamed Specialtysemi, Inc. later in February and adopted the Jazz Semiconductor, Inc. name in May. Conexant and affiliates of the Carlyle Group supplied initial backing, allowing the facility to operate as an independent specialty foundry. Shu Li became chief executive in May 2002. Jazz sought customers that needed specialized manufacturing for analog-intensive, mixed-signal, wireless, optical, power-management, storage, and aerospace and defense applications. RF Micro Devices invested $60 million in October 2002 and also became a customer. Despite this early support, Jazz recorded losses in each of 2003, 2004, and 2005. The company repeatedly filed or prepared registration documents for a proposed initial public offering between January 2004 and July 2006. The planned Nasdaq symbol was JAZZ, but the offering did not attract sufficient investor interest and was withdrawn. The next phase began with Acquicor Technology. Acquicor had been formed as a blank-check company by Gil Amelio, Steve Wozniak, and Ellen Hancock, former Apple Computer executives. After raising public and private capital, Acquicor announced in September 2006 that it would acquire Jazz for $260 million in cash. The transaction was supported by convertible-note financings in December 2006 and by a $10 million Conexant equity investment while completion was pending. The acquisition closed on February 16, 2007. On February 21, Acquicor renamed itself Jazz Technologies and changed its ticker to JAZ. Jazz Semiconductor remained the operating foundry subsidiary. Li left the chief executive role in March 2007, and Gil Amelio assumed leadership of the subsidiary. The new corporate structure faced severe financial and operating challenges. By the end of 2007, the company was dealing with debt, the effects of the broader economic downturn, and obligations connected with buying back shares from the Acquicor principals. Jazz Technologies reported a loss in early 2008, and its shares had fallen by more than 80 percent from their IPO-era price. Management indicated that it was looking for a buyer. In May 2008, Jazz agreed to a stock-for-stock merger with Tower Semiconductor, an Israel-based specialty foundry. The combination closed in September 2008. Tower Semiconductor became the parent of the Jazz business, while Amelio retired as an officer and director at closing. The transaction ended Jazz Technologies’ existence as an independent public-company structure and placed Jazz Semiconductor within Tower’s worldwide specialty manufacturing network. The brand’s historical identity is consequently tied both to its Newport Beach foundry heritage and to Tower Semiconductor’s subsequent ownership.

• 2008

  Tower Semiconductor merger completed

  [1]Jazz Semiconductoren.wikipedia.org

  Tower Semiconductor completed its merger with Jazz Technologies, making Jazz Semiconductor part of Tower’s specialty foundry operations.

• 2007

  Jazz Technologies created

  [1]Jazz Semiconductoren.wikipedia.org

  Acquicor completed the Jazz acquisition, renamed itself Jazz Technologies, and changed its public-company symbol to JAZ.

• 2006

  Acquicor announces acquisition

  [1]Jazz Semiconductoren.wikipedia.org

  Acquicor Technology announced a proposed $260 million cash acquisition of Jazz Semiconductor.

• 2002

  Independent foundry company established

  [1]Jazz Semiconductoren.wikipedia.org

  Jazz Semiconductor Systems was founded on February 15, 2002, after the former Conexant-associated Newport fabrication operation was separated into an independent business.

• 2002

  Company adopts Jazz Semiconductor name

  [1]Jazz Semiconductoren.wikipedia.org

  After briefly using the Specialtysemi name, the company became Jazz Semiconductor, Inc. in May 2002.

• 2002

  RF Micro Devices investment

  [1]Jazz Semiconductoren.wikipedia.org

  RF Micro Devices invested $60 million and became a customer, strengthening Jazz’s position in wireless-related specialty manufacturing.

A specialty wafer foundry serving fabless and integrated-device customers whose products require analog, mixed-signal, radio-frequency, and other application-specific manufacturing capabilities.

• Semiconductor foundry service

  Analog-intensive integrated-circuit manufacturing

  Jazz Semiconductor’s core offering was wafer fabrication for analog-intensive integrated circuits. The service was aimed at customers whose products depended on specialized analog process capabilities rather than only high-volume digital logic. Jazz supplied manufacturing capacity and process expertise to external semiconductor developers across communications, industrial, and other application markets.

• Semiconductor foundry service

  Mixed-signal manufacturing services

  The company manufactured mixed-signal devices that combine analog and digital functions on the same semiconductor platform. This capability supported customers developing communications and other systems in which signal conversion, interface functions, and digital control had to be integrated in a specialized process.

• Communications semiconductor manufacturing

  Wireless and radio-frequency devices

  Jazz served wireless and radio-frequency applications through specialty wafer fabrication. Its customer base included developers of communications components, with RF Micro Devices identified as both an investor and customer. The offering emphasized foundry manufacturing for specialized wireless designs rather than a consumer-facing product portfolio.

• Application-specific semiconductor manufacturing

  Optical networking, power, storage, and defense devices

  The foundry also supported customers developing optical networking, power-management, data-storage, and aerospace and defense products. These markets typically require differentiated process technologies, long product lifecycles, or specialized performance characteristics, aligning with Jazz’s positioning as a specialty rather than commodity foundry.

• 2008

  Merge with Tower SemiconductorM&A

  Background

  Jazz Technologies was under financial pressure from debt, operating losses, recessionary conditions, and a major decline in its public share price. Management indicated that it was seeking a buyer.

  Action taken

  Jazz agreed to a stock-for-stock merger with Tower Semiconductor, which was completed in September 2008.

  Aftermath

  Jazz Semiconductor became a wholly owned Tower Semiconductor operation, and Gil Amelio retired as an officer and director when the merger closed.

  Approximate value of Jazz after debt assumption. Approximately $40 million (2008 merger)

  Source

• 2006

  Accept Acquicor Technology acquisitionM&A

  Background

  Jazz had experienced continuing losses and unsuccessful attempts to complete an independent public offering. Acquicor Technology, a newly public blank-check company, offered a route to new capital and a public-company structure.

  Action taken

  Jazz agreed to be acquired by Acquicor for approximately $260 million in cash. The transaction closed in February 2007.

  Aftermath

  Acquicor renamed itself Jazz Technologies and operated Jazz Semiconductor as its wholly owned subsidiary, but the new structure later faced debt and market-value pressures.

  Announced acquisition value. $260 million (September 2006 announcement)

  Source

1. 1Jazz Semiconductoren.wikipedia.org
2. 2Jazz Semiconductor official websitejazzsemi.com